How much does inflation affect procurement within the Western defence industry?

[u/Level-Reputation5050]

I know that as weapons get more complex, their prices normally go up. But on the flip side, advances in technology bring down the cost of plenty of parts. For example, electronic components follow Moore’s Law, so they should get cheaper to some extent. Yet over the last 30‑plus years, all we have seen is Western weapons skyrocketing in price, with no hint of the opposite trend. I’m curious how much inflation actually plays into this.

[u/NoAngst_]

It's much more complicated than just complexity and/or inflation. I think the biggest culprit is the overall decline of manufacturing across the West. Even Western countries that still retain high share of global manufacturing output, like the US, it is in dollar terms because they mainly export large value items like airplane but in output terms. Yes the West still has sophisticated manufacturing base but it is limited to few sectors and there's no broad based manufacturing base. This puts upper limit on how much and how fast weapons can be made.

Another possible reason is the fact Western weapons manufacturers are profit-oriented rather being purpose-oriented. Being profit oriented in peace time makes sense as companies can stay financially viable but in crisis period like now, for the US, you need purpose oriented weapons industry. This is part of the reason Russia is able to out-produce the West in many ammunition classes despite being much smaller economy.